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Innovation for Changing Local and Global Realities at WPC 2012

Les Smith, Coty, discusses fragrance innovation and consumer impact at WPC 2012

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  • Jeff Falk, GCI magazine

    Jeff Falk, GCI magazine

    Jeff Falk, GCI magazine, moderates a panel at the 2012 World Perfumery Congress on the affect of fragrance on consumers purchasing beauty products, as well as fragrance business and product innovation.

    Jeff Falk moderates at a podium at WPC 2012
  • Marcella Bartoletti, MABA

    Marcella Bartoletti, MABA

    Marcella Bartoletti, MABA, discusses the impact of fragrance on beauty products at a panel for the 2012 World Perfumery Congress.

    Marcella Bartoletti speaks at a WPC 2012 panel
  • Sumit Bhasin, P&G Prestige

    Sumit Bhasin, P&G Prestige

    P&G Prestige's Sumit Bhasin participates in a panel at the 2012 World Perfumery Congress on fragrance business innovation, as well as world trends affecting the marketplace.

    Sumit Bhasin speaks at 2012 WPC panel
By: Jeb Gleason-Allured
Posted: August 31, 2012

This article originally ran in the September 2012 issue of Perfumer & Flavorist magazine. All rights reserved.

Fragrance is a key motivator for the first and subsequent purchases of many products, noted Marcella Bartoletti, global fragrance strategist for MABA, during a consumer packaged goods (CPG) panel at the 2012 World Perfumery Congress that was moderated by Jeff Falk, editor in chief, GCI magazine. “It is the emotional signature of a brand,” she added, noting that fragrances tell brand stories and fulfill their promise. Recognition of a scent’s importance has dovetailed with a growing emphasis on emotional marketing, which centers on the value of consumer experience. If fragrance suppliers and their customers execute properly, Bartoletti said, it will lead into a long-term success with the consumer and create new icons for the future. Doing it wrong, she concluded, will create a consumer disconnect.

The design equity and context of brands is much more focused on fragrance identity, added Sumit Bhasin, director, global innovation, P&G Prestige. Les Smith, senior vice president of research and development for Coty, added that often there is an inverse relationship between a product’s level of functionality and the emotional facet of brand identity. To the far end of the emotional side, he explained, fine fragrance is nonfunctional. Among more functional categories, Smith said, it is well-worth fragrance suppliers’ time to better understand the functional abilities of products in order to support them olfactorily. As Bartoletti noted, fragrance can boost perception of functionality.

Changing Fragrance Markets and Habits

Fragrance habits are changing, explained Bhasin, adding that trends are more fluid with the influence of social media and travel. Among opportunities created by changing habits, he said, is that many Asian consumers who currently buy fragrance primarily for gifts may be motivated to incorporate fragrance into their own daily beauty regimens.

Smith warned that the areas of rapid development—Brazil, Russia, India, China and Korea—are well on their way to market saturation, driven in part by digital connectivity. Big brands conceived for the world will work, he said, but if they feel ‘local’ they may not resonate globally. Many of today’s brands focus on local resonance, including forging connections with local celebrities. The juice sells the product, ultimately, said Smith, and so modifications can be made for local consumers.

“The consumer is always the ultimate nose,” added Bartoletti. Consumers’ preferences are shaped by habits and climate and social conditions, so it’s important to design with the end in mind,” she added.

Economic Impact on Launches

Low consumer confidence in many geographic regions has reshaped consumer expectations of brands, said Bartoletti. Even in this challenging climate, she noted, beauty products have a special allure due to their focus on aspirational aspects of affordable luxury.

Even with the recent global economic difficulties, said Smith, about 1,200 fragrances were launched in 2011. “It’s an astonishing number,” he said. “I don’t personally know the ‘hit’ rate of these products.” He added that the objectives of launches are different than they were even a few years ago. Many companies are still looking to launch a classic that will sell for 50 years, but brands are managed with a reduced life expectancy. Classics will be supported but not expected.

 

“This is a never-ending question for our industry,” said Bhasin. “The price of entry is relatively low, so you get brand proliferation.” Over time, he explained, the way in which classics are sustained will change. Rather than building off line extensions, there will be more of a system of “classic support.” Meanwhile, he said, segmentation is going to play a very big role in terms of territories that particular brands can own. The market’s tail is very long, he concluded, but the top 50 or 60 scents are very clearly defined.

Smith added that consumers shop in different tiers and so manufacturers have created brands to reach various levels. Ultra prestige, he said, is recession-proof.

No matter the category, Bhasin said, “Establishing a trust the consumer can have with a brand is crucial.” He called for a reexamination of the meaning of “value.” Consumers are demanding more value out of products, he explained, and there is no willingness to compromise, even in mass categories.

CPG-fragrance House Relationships

“The traditional supplier-customer model has changed dramatically,” said Bhasin. “It’s really a partnership. Today you’re looking to develop win-win solutions and making sure you don’t duplicate work.” In managing the value equation, CPGs are contending with ever greater sustainability and technical demands, he added, and so the old reactive model of the traditional briefing process is no longer sufficient. Moving forward, CPGs and fragrance suppliers will move toward co-innovation, developing solutions together.